Tesla’s Desperate Gamble: Musk’s EV companies announce second round of discounts in China

It looks like Tesla is hell bent on starting a price war in China. Tesla has decided to drop its prices again in China this week, which has made people worry what exactly is Elon Musk and his EV company up to,

The American EV makers have slashed the prices of their Model S sedans and Model X SUVs that they currently have in stock by as much as 70,000 yuan (that’s around $9,600 in US dollars). The news came out on Wednesday through their official WeChat account.

Just two days ago, Tesla already lowered the prices for their Long Range and Performance versions of the Model Y SUV by 14,000 yuan.

They’re also keeping an insurance subsidy going for the base version of the Model 3 sedan, which is going to last until the end of next month.

These price cuts could be ramping up competition in the world’s biggest car market.  This could put the heat on other car makers like BMW and the Mercedes-Benz Group to do the same thing and bring down their prices too.

Besides these discounts, Tesla is still throwing in some other perks like free fast-charging credits and test runs of Tesla’s souped-up Autopilot system for people who refer others.

At the beginning of premarket trading on Wednesday, Tesla’s shares took a 1.3 per cent dip. The stock has experienced a 20 per cent decline ever since CEO Elon Musk cautioned about the possibility of more price reductions during the company’s earnings call on July 19.

Tesla’s deliveries from its manufacturing plant in China took a sharp nosedive of 31 per cent in July, marking the lowest point for this year.

The car manufacturer had revealed the previous month that its global production would witness a drop in the third quarter due to factory upgrades, though they didn’t provide specific details about the changes. People are anticipating that they’ll soon commence production of an updated version of the Model 3 sedan.